How it works (Example):

There are several water ETFs trading in the stockmarket. Some water ETFs focus only on specific countries, while others focus on regions or even the entire global market.

For example, the PowerShares Water Resources Portfolio ETF (NYSE: PHO) invests only in American water companies. The PowerShares Global Water Portfolio ETF (NYSE: PIO) invests more globally, as does the Guggenheim S&P Global Water Index (NYSE: CGW). The First Trust ISE Water Index ETF (NYSE: FIW) focuses on waste water and potable water.

Why it Matters:

All humans need water to survive, which makes water a valuable investment opportunity, especially considering that the earth's population is growing, as is its demand for water. Water ETFs tend to be the simplest way for investors to make water-related investments, which can include treatment facilities, water-equipment manufacturers, water distributors, water retailers and companies that operate water sources.

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